ERNST: Fee forgiveness puts tax burden back on us

Published: Wednesday, February 2, 2011 at 1:00 a.m.

Last Modified: Tuesday, February 1, 2011 at 9:35 p.m.

My taxes just went up. So did yours if you're a property owner in Sarasota or Manatee counties. It happened last week when the Sarasota County Commission voted to lower the tax on those who construct new buildings, as Manatee County did earlier.

Those construction taxes are better known as impact fees, which are designed to help pay for the impact that new developments -- residential and commercial -- place on public services such as roads, parks, libraries and schools.

An influx of new residents and businesses often forces local government to buy land, add roads and expand infrastructure that it would not otherwise.

If the newcomers are not paying for it, someone else has to. That someone is you.

By cutting Sarasota County's road impact fees in half for two years, the commissioners have in effect shifted the tax burden for new construction onto existing residents. Manatee cut its fees in 2009, and is considering another cut.

Road impact fees in Sarasota range from $2,552 to $6,772 per home, depending on square footage, and even in today's depressed market amount to $5 million to $6 million a year countywide.

The commissioners figure that lowering impact fees will spur construction and provide jobs. That's a humanitarian goal at least. We all have famiy members or friends who have lost jobs in the building downturn.

However, impact fees have not caused the dearth of construction in Southwest Florida. That's the result of a worldwide recession, tight credit and a glut of existing homes.

Considering the latter, it seems counterproductive to try to stimulate an industry that has already oversaturated its market.

An alternative approach would encourage rehabilitation of derelict buildings and neighborhoods, perhaps through a relaxation of codes or zoning. That would put little new stress on services, and if it raised property values in select areas, it might even lower the tax burden overall.

Developers claim that high impact fees staunch growth. Not so, according to history. Collier County's fees were once among the highest in Florida. At the same time, the county was one of the fastest-growing areas in the United States.

Just as high fees will not deter construction, low fees will not revive it. The commission's actions will simply result in the rest of us paying more of the bills for development that would have come along anyway.

One last point: impact fees do not materialize out of thin air. Local governments hire economists to compute them. These experts study patterns to come up with figures that are localized, fair, defensible, and if anything, conservative.

To then arbitrarily cut them in half as a well-meaning, but ill-conceived inducement does nothing but strike at their credibility.

In two years, no matter how well the economy is doing, there will be an outcry among builders and developers when the commissioners consider reinstating the fees in their entirety.

By then, the forgiven impact fees will be part of the profit margin. Rest assured, someone is making money off this. It's just not you and me.

<p>My taxes just went up. So did yours if you're a property owner in Sarasota or Manatee counties. It happened last week when the Sarasota County Commission voted to lower the tax on those who construct new buildings, as Manatee County did earlier.</p><p>Those construction taxes are better known as impact fees, which are designed to help pay for the impact that new developments -- residential and commercial -- place on public services such as roads, parks, libraries and schools.</p><p>An influx of new residents and businesses often forces local government to buy land, add roads and expand infrastructure that it would not otherwise.</p><p>If the newcomers are not paying for it, someone else has to. That someone is you.</p><p>By cutting Sarasota County's road impact fees in half for two years, the commissioners have in effect shifted the tax burden for new construction onto existing residents. Manatee cut its fees in 2009, and is considering another cut.</p><p>Road impact fees in Sarasota range from $2,552 to $6,772 per home, depending on square footage, and even in today's depressed market amount to $5 million to $6 million a year countywide.</p><p>The commissioners figure that lowering impact fees will spur construction and provide jobs. That's a humanitarian goal at least. We all have famiy members or friends who have lost jobs in the building downturn.</p><p>However, impact fees have not caused the dearth of construction in Southwest Florida. That's the result of a worldwide recession, tight credit and a glut of existing homes.</p><p>Considering the latter, it seems counterproductive to try to stimulate an industry that has already oversaturated its market.</p><p>An alternative approach would encourage rehabilitation of derelict buildings and neighborhoods, perhaps through a relaxation of codes or zoning. That would put little new stress on services, and if it raised property values in select areas, it might even lower the tax burden overall.</p><p>Developers claim that high impact fees staunch growth. Not so, according to history. Collier County's fees were once among the highest in Florida. At the same time, the county was one of the fastest-growing areas in the United States.</p><p>Just as high fees will not deter construction, low fees will not revive it. The commission's actions will simply result in the rest of us paying more of the bills for development that would have come along anyway.</p><p>One last point: impact fees do not materialize out of thin air. Local governments hire economists to compute them. These experts study patterns to come up with figures that are localized, fair, defensible, and if anything, conservative.</p><p>To then arbitrarily cut them in half as a well-meaning, but ill-conceived inducement does nothing but strike at their credibility.</p><p>In two years, no matter how well the economy is doing, there will be an outcry among builders and developers when the commissioners consider reinstating the fees in their entirety.</p><p>By then, the forgiven impact fees will be part of the profit margin. Rest assured, someone is making money off this. It's just not you and me.</p><p>Eric Ernst's column runs Wednesdays, Fridays and Sundays. Contact him at eric.ernst@heraldtribune.com .</p>